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Kirk Willis Partner PRESENTS Dram Shop Liability for Adjusters From A to Z

Kirk Willis Partner PRESENTS Dram Shop Liability for Adjusters From A to Z. April 28, 2005. When it’s all on the line. FOR THE PLEASURE OF. TEXAS PROPERTY CASUALTY INSURANCE GUARANTY ASSOCIATION. TEXAS DRAM SHOP ACT. EL CHICO – Landmark Decision. Slows reaction.

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Kirk Willis Partner PRESENTS Dram Shop Liability for Adjusters From A to Z

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  1. Kirk Willis Partner PRESENTS Dram Shop Liability for Adjusters From A to Z April 28, 2005 When it’s all on the line

  2. FOR THE PLEASURE OF TEXAS PROPERTY CASUALTY INSURANCE GUARANTY ASSOCIATION

  3. TEXAS DRAM SHOP ACT EL CHICO – Landmark Decision • Slows reaction • Alcohol distorts perception • Impairs motor skills

  4. TEXAS DRAM SHOP ACT “An alcoholic beverage licensee owes a duty to the general public not to serve alcoholic beverages to a person when the licensee KNOWS OR SHOULD KNOW the patron is intoxicated.”

  5. TEXAS’ MODERN DRAM SHOP ACT • Created June 11, 1987 under emergency provision • “Legislative purpose of DRAM shop – Protection, welfare, health, peace, and safety of the people in the state

  6. TEXAS MODERN DRAM SHOP • Providing, selling, or serving an alcoholic beverage may be the basis for statutory cause of action under section 5.01.

  7. TEXAS DRAM SHOP ACT • At the time of service of alcohol, it was obvious that the patron was intoxicated • The intoxication of the beverage proximately caused the damages suffered

  8. TEXAS DRAM SHOP ACT Providers “Provider” means a person who sells or serves an alcoholic beverage under authority or license or permit issued under the terms of this code or who otherwise sells an alcoholic beverage to an individual.

  9. TEXAS DRAM SHOP ACT Does compensation always have to be in dollars$$?

  10. TEXAS DRAM SHOP ACT • Server providing alcohol should have known the person was a clear danger to himself or others; and • The intoxication of recipient was the cause of damage.

  11. TEXAS DRAM SHOP ACT Corporate concealment (wink, wink) • Single business enterprise and alter ego

  12. TEXAS DRAM SHOP ACT Single Business Enterprise “Test” • Common employees; • Common officers; • Centralized accounting; • Payment of wages by one corporation for other employees; • Common business; • Employees rendering services for both corporations; • Document; • Transfer of funds; • Unclear allocation of profits between corporations.

  13. TEXAS DRAM SHOP ACT Social Host Protected: • Know how much consumer had prior • Too many people • Not skilled – may not be apparent

  14. TEXAS DRAM SHOP ACT Social Host – Relative to minors?? • Ability to marry; • Ability to vote; • Ability to contract; • Penal violations; • Capital punishment; and • Service in military

  15. TEXAS DRAM SHOP ACT Landlord/Lessors Lessor of real property was as a matter of law Not a provider of alcoholic beverages

  16. TEXAS DRAM SHOP ACT • HYPOTHETICAL QUESTION • KISS 106 • Leases Place • Requires club activity • Lessor has to approve live entertainment

  17. TEXAS DRAM SHOP ACT Can a distributor be held liable under the Texas Dram Shop Act?

  18. Objective Standard of liability The standard under the Texas Dram Shop Act requires proof that it was APPARENT TO THE PROVIDER that the individual being sold, served, or provided with an alcoholic beverage was OBVIOUSLY INTOXICATED to the extent that he presented a CLEAR DANGER. TEXAS DRAM SHOP ACT • B1: Apparent to the provider • B2: Obviously intoxicate • B3: Clear Danger

  19. TEXAS DRAM SHOP ACT Social Host • Know how much consumed prior • Too Many People • Not Skilled

  20. TEXAS DRAM SHOP ACT Liability Under Texas Dram Shop Act • Apparent • Obvious • Clear Danger

  21. TEXAS DRAM SHOP ACT Evidence at Trial • Police Testimony at Scene • Expert Link • Credit Card Recipient

  22. TEXAS DRAM SHOP ACT Bruce v. KKB • Amount Woman Drank • Woman Tried to Start Car with Coin • Accident 20 minutes Later • Expert Link-up

  23. TEXAS DRAM SHOP ACT Proximate Cause Jury must be asked • If the intoxication of the recipient was the cause • Rather than the conduct of the Provider

  24. TEXAS DRAM SHOP ACT Foreseeability • Skipper Case • Bottomless Pit Case • South Dallas Club Case

  25. TEXAS DRAM SHOP ACT Sales to Minor • Protection of Minors • Treatment by the Court • Club Corp of America

  26. TEXAS DRAM SHOP ACT Defenses to Claims by Minors • False Representation by Minor • Fake Identification • Apparent Valid Texas Drivers License • Physical Appearance

  27. TEXAS DRAM SHOP ACT Defenses to Dram Shop Texas Servers Training Act – “Safe Harbor” Provision • Employer requires its employees to attend a commission approved seller training program. • The employer has actually attended. • Employer has not directly or indirectly encouraged violation.

  28. TEXAS DRAM SHOP ACT Encourage v Discourage • Knowing employees are not looking for good identification. • Waitress check the identification. • Make sure person ordering, indeed, drinks them. • Have written guidelines. • Meetings on guidelines. • Owner not addressing problem. • Install Cameras • Employee Report Repeaters • Address the failure of non-report.

  29. TEXAS DRAM SHOP ACT Defenses Against Punitives • No Punitive Damages • No Criminal Acts

  30. TEXAS DRAM SHOP ACT Special Relationships Employer/Employee • Otis • Love v. Houston, Inc.

  31. THANK YOU!

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